Fed Asks Goldman, JP Morgan To Lend To AIG

Posted by John Carney, Sep 15, 2008, 4:13pm

We're not out of this yet. The Wall Street Journal is reporting that the Federal Reserve has asked Goldman Sachs and J.P. Morgan Chase to help make $70-$75 billion in loans available to the AIG. The report cites those "people familiar with the situation" who are the only ones who know anyone these days.

Morgan Stanley is playing an advisory role to the Fed on the AIG situation, much as it did with Fannie Mae and Freddie Mac.This strikes us as an excellent way to prevent yourself from being in the awkward position of having to tell the Fed you don't really feel like loaning a faltering insurance company a few tens of billions of dollars.

"Hey, Tim. We've been looking at the books and we decided you should totally get Jamie and Lloyd to fork over the cash. Love ya, John Mack."


Goldman, J.P. Morgan Are Asked To Lead $75 Billion AIG Loan Effort [Wall Street Journal]

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Comments

1

Posted by guest, Sep 15, 2008 4:34PM

Morgan Stanley played an advisory role to the Fed on Fannie? How much did they get paid for that?

2

Posted by guest, Sep 15, 2008 4:34PM

Why did Goldman's Eastern Operative, China Investment Company, so prominently touted as a potential Lehman bidder, suddenly drop off the radar? And JC Flowers, too?

Are they just names trotted out to fill up boilerplate news releases, or do they actually do business?

3

Posted by guest, Sep 15, 2008 4:37PM

@1 - I believe it was just under 100k. Should cover the costs of the flights on the shuttle between NYC and DC. Solely for prestige.

4

Posted by guest, Sep 15, 2008 4:44PM

$75 billion? I thought they needed $40.

Not good.

5

Posted by Anal_yst, Sep 15, 2008 5:07PM

@ 4

$40, $75, I think thats just a rounding error at this point

6

Posted by guest, Sep 15, 2008 5:16PM

actually @4 has a point: AIG is getting $20bn from its subsidiaries, why does it need $70bn more when talk over the weekend was for a total of $40bn??...

7

Posted by guest, Sep 15, 2008 5:21PM

If they do the $75B, the fed only has to buy it back from 1 or 2 parties. If they did $5 here, $40 here, etc there would have to be more weekend meetings.

8

Posted by guest, Sep 15, 2008 6:56PM

J.C Flowers just does due dilly consulting for BAC now. They have MACed out of every deal they tried to do.

9

Posted by guest, Sep 15, 2008 7:44PM

AIG obviously now needs more than $40bn b/c it has been getting pounded as a result of recent events... It may have needed only $40bn last week, but now the markets (and particularly financials and AIG) have worsened and are expected to get even worse before they get better, so AIG needs more...

10

Posted by guest, Sep 15, 2008 9:38PM


Fitch has downgraded. Does that mean tis a DEAD MAN WALKING ?

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